Johannesburg Stock Exchange hits all-time high, rand firms (updated)

First National Bank Alaska

09/01/2023 09:26

(Recasts with Johannesburg Stock Exchange hitting all-timehigh,
updates prices)
    By Anait Miridzhanian and Rachel Savage
       JOHANNESBURG, Jan 9 (Reuters) - 
    The Johannesburg Stock Exchange hit an all-time high on
Monday morning as South African technology and mining stocks
gained on enthusiasm about China reopening its borders and hopes
the U.S. Federal Reserve may slow the pace of interest rate
hikes.
    The all-share index  .JALSH  rose as high as 78,450 points
and at 8.55 GMT was trading at 78,342 points, about 2% higher
than the previous close. The blue-chip index of top 40 companies
 .JTOPI  also reached an all-time high, of 72,411 points.
    Mining companies were among the big winners, with the mining
index  .JMINI  up 2.35% to 61,707 points, as the prices of basic
materials rose on the hope that China's economy will rebound
after COVID-19 policies dampened demand and a weaker dollar
boosted gold prices.
    "The market is expecting that US, UK and Europe will enter a
mild recession and that will lead to a cut in interest rates in
the second half," said Wayne McCurrie, a portfolio manager at
First National Bank.
    "Another factor that is helping the South African market is
China just abandoning its zero COVID policy over the weekend and
that impact is seen in the mining stock on the market, as well
as Naspers." 
    Tech investor and market heavyweight Naspers Ltd  NPNJn.J ,
through its subsidiary Prosus  PRXJn.J   PRX.AS , holds a 27%
stake in Chinese tech and gaming giant Tencent and is its
biggest investor. Naspers  NPNJn.J  jumped 3.92%, while Prosus
 PRXJn.J  climbed 3.86%.
    Improved risk sentiment also boosted the rand  ZAR=D3 ,
which at 8.55 GMT traded at 17.00 against the dollar, 0.69%
stronger than its previous close.
    ETM Analytics attributed the rand's recovery to last week's
strong U.S. labour market data and more measured views of
indications that the government may try to change the South
African Reserve Bank's (SARB) mandate. 
    "Talk of changing the SARB's mandate is not necessarily
something to fear," ETM said in a note.
    Gwede Mantashe, chairman of the governing African National
Congress (ANC), said on Friday that it wanted to expand the
SARB's mandate to do more to support the economy, prompting the
rand to fall during the session.
    The central bank's focus, spelled out in the constitution,
is "to protect the value of the currency in the interest of
balanced and sustainable economic growth".
    The government's benchmark 2030 bond  ZAR2030=  was stronger
in early deals, with the yield down 15 basis points to 9.85%.
 (Reporting by Anait Miridzhanian, Rachel Savage and Promit
Mukherjee; Editing by Alex Richardson and Conor Humphries)
 ((Anait.Miridzhanian@thomsonreuters.com))